PMO’s instruction to Niti Aayog to prepare plans to reduce dependence on China for bulk drugs may have come too late.

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Last week, the prime minister’s office instructed Niti Aayog to prepare a plan on an issue critical to the pharmaceutical sector. The planning agency has been asked to find ways to reduce the country’s dependence on China for active pharmaceutical ingredients (APIs). Also called bulk drugs, APIs are ingredients that give any medicine its therapeutic effect. The country imports more than 80 per cent of its bulk drugs; 65 per cent from China. The drugs in question include common painkillers such as paracetamol and antibiotics such as amoxicillin. In November last year, National Security Adviser Ajit Doval had warned that the country runs the risk of a severe shortage of medicines because of its over-dependence on China for APIs. The PM’s directives to Niti Aayog are welcome. But the country might have left it a little too late. Indigenous APIs are likely to cost four times more than those imported from China.

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India was once the source of low cost and good quality bulk drugs. But in the past 25 years it has been outpaced by China. While the country became the hub of generic medicine manufacturing, stringent controls on bulk drug production and neglect of research combined to keep indigenous API production way below domestic requirements. Take the common bulk drug Penicillin-G (Pen-G). Till 2000, the government licensed the production of this bulk drug, and as a result demand outstripped indigenous production. When the government decided to relax controls, China had become the global leader in Pen-G production. By the mid 2000s, China was beset by overproduction problems and was dumping Pen-G in India, skewing the market against Indian companies. At the same time, the country did not invest in its public sector outfits; three were declared sick.

The government intends to make the Indian bulk drug industry competitive vis-a-vis China in another four years. But industry believes the turnaround could take eight to 10 years. There is reason for pessimism. The government declared 2015 as the “Year of Active Pharmaceutical Ingredients”. There were some deliberations but very few initiatives. The PMO’s directives have come when the industry is confronted by disruptions in the Chinese supply of the bulk drug, API D-penicillamine. The disruption has triggered a shortage of drugs for Wilson’s disease, a genetic disorder with no alternative treatment. Clearly, the directives are too little and very late.